As global production networks proliferate, assembly processes tend to create less value added than other activities along value chains such as design, research and development (R&D), distribution, and after-sale services. In addition, domestic value added in gross exports turn out to be smaller than foreign value added in gross exports. As a result, which tasks along global value chains a company decides to participate in has become more important than how much a company exports. In other words, companies pay more attention to value added than gross exports.
This study decomposes the value added in gross exports into its components including domestic value added and foreign value added. Specifically, we exclude transaction costs such as net taxes on products for this study, which accounted for about 3 percent of total gross world exports from 1995 to 2011 on average. This study indicates that the share of Korean domestic value added in exports to exports in gross value decreased from 69.9 percent in 1995 to 55.4 percent in 2011, comparable to the shrinkage in the world average from 83.5 percent to 78.3 percent during the same period.
Domestic value added in exports returned to Korea increased from 0.5 percent to 0.6 percent while domestic value added reexported to third countries rose from 12.7 percent to 13.8 percent during the same period. On the contrary, foreign value added in exports increased substantially from 22.7 percent to 37.8 percent. This result reveals that Korean exports of parts and raw material have been utilized in a relatively small degree, while foreign components imported to Korea have been utilized for Korean exports in a relatively large degree.
The decomposition of value added in exports shows that a network of value added along global value chains centers around the United States, China, and the European Union. When we investigate the comparative advantage of Korean industries from 1995 to 2011, they turn out to have utilized the benefits of global value chains. Specifically, electronics, transport equipment, machinery, metal, distribution and transportation services, and telecommunication and transportation services have made the best of global production networks by efficiently outsourcing intermediate goods.
This study also investigates the determinants of value added in exports by estimating the expanded multi-sector gravity model, with panel data covering 13 countries and 18 sectors for 17 years from 1995 to 2011. Empirical evidence shows that trade costs such as tax and transportation costs reduce value added in exports, implying that trade facilitation measures and tax policy lowering trade costs are vital for the promotion of value added in exports.
We also find that material and service offshoring have a significant positive effect on value added in exports, supporting the notion that efficient offshoring of material and services inputs raises productivity and competitiveness in manufacturing as well as services industries. In addition, we find that regional trade agreements have significant value added trade creation effects. However, the magnitude of these effects is smaller than those of RTAs on gross exports.
This is because the reduction in trade costs prompts firms to split the stages of their production processes across member countries of RTAs. Thus, goods and services move across countries multiple times while the amount of value added contained in gross exports does not increase as significantly.
Furthermore, we find that a higher share of imported intermediates encourages participation in GVCs. Finally, we explore the determinants of industrial competitiveness measured by the trade specialization index, and find that the reduction of transaction costs is crucial for enhanced competitiveness. Also, service offshoring strengthens competitiveness in intermediates. The results from this study provide the following implications for Korean policy.
First, Korea needs to initiate industrial restructuring in order to tackle the issue of the fall of domestic value added in exports since the early 2000s. Second, it needs to set up strategies to upgrade its position along global value chains, considering that the networks of value chains depend on country and industry. Third, it needs to implement trade facilitation measures in order to reduce transaction costs, of which results for Korea turn out to be higher than the world average. Fourth, the role of the services sector is very important in upgrading the comparative advantage of manufacturing sectors. Finally, the improvement
of domestic regulations are urgently called for to facilitate the free movement of production factors and to efficiently utilize global value chains.

Contents

Executive Summary

I. Introduction

II. Literature Review 10

III. Data
1. Employment Exchange in India
2. Data Description

IV. Specification of a Matching Function in the Stochastic Frontier Framework

V. Estimation Results
1. Estimation of Matching Functions
2. Estimation of Stochastic Frontier Models to Produce Matching Efficiencies across States
3. Relationship between Matching Efficiencies and Variables of Interest

VI. Concluding Remarks

References 

We analyze state-level matching efficiency in the Indian labor market using stochastic frontier analysis. The key contribution of this research is the estimation of matching efficiency at the state level because the estimates can be used for a state-level measure of labor market conditions.
Next, we explore the relation between estimated matching efficiency and population density (or labor market flexibility). The results show that matching efficiency is heterogeneous across states with considerable variation in accordance with the regional diversity in India.
However, we find that there is no relationship between the estimated matching efficiency and the well-known labor market conditions of interest. The correlations are either close to zero or not statistically significant, suggesting that other regional diversity may affect matching efficiency in India. 

Preface

I. Introduction

II. Structural Problems of the Korean Economy: Dampened Ripple Effects from Export Sector and Decrease in the Growth of Households Income

1. Motivation
2. Methodology
3. Stylized Facts
4. Reasons for the Decline in the Growth of Domestic Demand
4.1. Dampened Ripple Effects from Export Sector
4.2. The Decrease in Growth of Households Income
5. Concluding Remarks

III. The Temporary Employment Contracts and the Productivity of Firms: Evidence from Korean Panel Data

1. Introduction
2. Empirical Specification
3. Data
4. Estimation Results
5. Concluding Remarks

IV. Households Debts and Consumption: Necessity-driven Entrepreneurs

1. Introduction
2. Necessity-driven Entrepreneurs
3. Empirical Framework
4. Empirical Results
5. Concluding Remarks

V. Conclusion

References

Appendix

Executive Summary 

Economic growth in Korea has slowed down dramatically after the Asian financial crisis of 1997. The average growth rate of real GDP of Korea before the crisis (1981-1996) was 9.3%, while it was reduced to 3.7% during the period (2003-2014) after the credit card lending boom following the financial crisis. Coincidently, the patterns of domestic demand growth before and after the crisis were similar to the GDP growth: the average growth rate of Korean real domestic demand was 8.8% and -0.3%, in the respective periods.
This remarkable decline in both growth rates should not be attributed to the factors that are linked to the short-run economic fluctuations because these phenomena have lasted more then 10 years after the Asian financial crisis. Instead, structural factors related to the domestic market or exports are more likely to induce the significant declines in the growth of these two variables. In this study, we focus on identifying those structural factors that are responsible for the decline in the growth rate of domestic demand after the Asian financial crisis, which may result in the decrease in economic growth.
Motivated by observing dramatic changes in the growth rates of the relevant variables such as GDP, domestic demand, investment, and exports, we consider two structural problems that the Korean economy faced after the Asian financial crisis: i) one is the dampened ripple effects of exports on domestic demand and thus on GDP; ii) the other is the decrease in the growth of household disposable income.
First, exports can contribute to the economic growth via two channels. One is the direct contribution to the GDP. The other is the indirect contribution to the GDP through the domestic demand (that is, the ripple effect of exports on GDP). As firms export more, they tend to use more production inputs and thus are more likely to increase investment and employment, which results in the increase in domestic demand. In fact, the data reveal that about one third of GDP growth can be accounted for by exports directly in the period of 1981-1996. This implies that two third of GDP growth can be explained by the domestic demand. In contrast, the Korean economic growth after the Asian financial crisis is entirely driven by export growth, that is, the growth of export sector does not boost domestic demand after the crisis. In other words, the ripple effect of export sectors on GDP has significantly dampened after the Asian financial crisis.
Furthermore, we found two potential reasons for the dampened ripple effect from the export sector. These reasons are closely related to changes in investment behaviors of large-sized Korean exporting firms before and after the Asian financial crisis: i) the large-sized exporting firms do not invest their earnings from exports any more to create new industries; ii) they tend to use more foreign value added contents for their exports and to increase outward FDI by participating in the Global Value Chains (GVCs).
Second, another structural factor that affects the pattern of domestic demand before and after the Asian financial crisis is closely associated with the decrease in the growth of household real disposable income. Its growth rate was 10.3% in the former period (1981-1996), which is higher than the GDP growth rate. Its growth rate, in contrast, was 2.3% after the financial crisis, which is lower than the GDP growth rate. This remarkable decrease in the growth of household income may influence household consumption, and hence economic growth. In fact, the data reveal that the real consumption growth rate was 8.4% in the former period and 2.4% in the latter period, respectively. These patterns of consumption growth rates before and after the crisis were similar to the patterns of both the GDP and the income growth rate. In addition, the decrease in household disposable income is more likely to induce increase in household debts and thus an increase in the burden of debt service.
This will further restrict consumption and domestic demand growth, which may result in an overall decline in economic growth. To be more specific, we pointed out three potential factors that are closely linked to the decrease in the growth of household disposable income. These reasons are related to the labor market reforms after the Asian financial crisis: i) a seizable number of necessity-driven entrepreneurs (i.e., self-employed households) whose income are relatively low, ii) a large proportion of temporary workers whose wages are about 70 to 80% of the regular workers, and iii) a relatively low wage in small and medium-sized enterprises (SMEs) which employ a large portion of total workforce.
In the two subsequent chapters, we examined the two issues related to the structural problems of the Korean economy using the micro-level data: i) a link between temporary employment contract and firms’ productivity and ii) a difference in consumption behavior between wage workers and self-employed households. Motivated by concerns that an increase in the share of temporary workers in total employment can potentially harm firm productivity, we empirically investigated the relationship between temporary employment and firms’ productivity. The estimated results show that using temporary workers decreases firms’ productivity.
Besides, we found some evidence that a higher conversion rate from temporary to permanent worker leads to the increase in firm’s productivity. Finally, we looked into the seriousness of the self-employed household debt that may negatively affect consumption, and thus the overall domestic demand. To do this, we examined the different patterns of consumption behavior between wage workers and self-employed households using the household-level panel survey data.
The key finding is that the financial debt of self-employed households is negatively associated with consumption expenditure, while this relationship is positive for wage workers. That is, the self-employed households tend to make a loan (i.e., business loans) that is not directly related to consumption itself. Rather, they tend to reduce their consumption due to a heavy debt burden from business loans.
To the extent that the dampened ripple effects from the export sectors after the Asian financial crisis are mainly due to the changed investment behaviors of large exporting firms, policy makers should develop policies which aim at providing a better environment where small and medium-sized firms can participate in global value chains more actively. Those firms are not likely to use more foreign value added contents or invest in foreign countries because of their small sizes and limited capabilities. Instead, they may participate in global value chains by attracting multinational firms. To do this, those firms should develop better technologies or produce high quality goods and/or services which can be differentiated from foreign small- and medium-sized firms so that they can have comparative advantages. And policies should be able to encourage small and medium-sized firms to develop those technologies and to produce those goods and services.
Most importantly, polices should be aimed at attracting foreign multinational firms so that domestic firms benefit from the active participation in global value chains. To the extent that the decrease in the growth of household disposable income is due to the presence of significant share of necessity-driven entrepreneurs and non-regular workers, and their relatively low income, policy makers should reform labor markets to deal with these issues. In particular, policies should be aimed at reducing the use of temporary workers by raising the conversion rate from temporary to permanent employment. In addition, alternative job opportunities which may absorb those self-employed workers should be created.
There is a large degree of human capital mismatch: retired workers, in general, are more likely better matches for new businesses such as food and beverage franchise and agency for selling mobile phones. If there exist jobs where they can take advantage of their human capital, they would have less incentive to open those businesses which contribute to decreasing labor productivity in the service sector. 

내용없음 

The influx of foreign investment to Korea began in the 1980’s, and increased dramatically following the establishment of the ‘Foreign Investment Promotion Act’ in 1998. However, it declined in the early 2000s because of global economic slowdown due to events such as the 9-11 terrorist attack and Information Technology Bubble Decay, etc. Investments have rebounded since 2004 and attracted more than 10 billion dollars thereafter, reaching a peak of 19 billion dollars in 2014.
Most governments believe that FDI contributes to economic development by creating jobs and introducing advanced technology and management practices to the host country. Based on this belief, governments provided various incentives such as tax breaks, relaxed regulations, and cash grants to attract multinational companies to their respective countries. This includes the Korean government, which changed its restrictive strategy to actively attract foreign firms since the Asian financial crisis by providing a variety of incentives for foreign firms.
As a result, foreign firms now account for about 20 percent of total exports and 6 percent of employment, and have had significant impacts throughout the economy. In recent days, some questions have been raised concerning differential effect of foreign firms on domestic small and medium sized enterprises (SMEs) and skilled labor, with subsequent discussions on the relationship of FDI and economic polarization. As multinational firms which are known to be more productive and possessed of more advanced technology enter the domestic market, they might bring about intense competition and crowd out domestic firms from the market, in particular SMEs.
Also, foreign firms in technology-intensive and services industries might demand more skilled labor, and thus increase wage premium for high-skilled labor. Although both foreign direct investment and economic polarization are very important issues, there are relatively few studies which investigate their relationship. It is this lack of research on FDI and economic polarization that provided motivation for this report, which examines whether foreign firms have differential impacts on the survival and growth of SMEs and increase wage premium for high-skilled labor. This was done by using foreign investment data from Korea's Ministry of Trade, Industry, and Energy; firm-level data from Statistics Korea; and survey on labor conditions by type of employment from Ministry of Employment and Labor.
According to the empirical investigation on FDI and exit and sales of domestic firms, foreign firms exert pressures to drive domestic firms from the market, and SMEs in particular. In addition, crowding-out effects are shown to be stronger for SMEs in the manufacturing sector and the low-export group. In contrast, according to the empirical investigation on FDI and change in sales of domestic firms, the presence of foreign firms in the same industry increases sales of domestic firms; the magnitude of the change being larger, in particular, for SMEs. Also, the positive impact are larger for SMEs in the manufacturing sector and high-export group.
To summarize the results on FDI and survival/growth of domestic firms, we cannot say that FDI aggravates polarization of firms because while it drives SMEs from the market on one hand, its raises their sales on the other. From the perspective of the whole economy, foreign firms raise productivity of the economy by removing uncompetitive firms from the market and then increasing productivity of the surviving domestic firms. According to the theoretical and empirical investigation on FDI and wage premium for skilled labor, we found that FDI in specific sectors, such as electronics and electricity, food and accommodation, finance and insurance, machine equipment, business service, wholesale and retail distribution, other manufacturing, professional engineering in chemical industries; increases wage premium for high-skilled labor.
In other words, foreign firms in these industries are more skill intensive, demand more high-skilled labor, and hence increase wage premium for high-skilled labor. Also, since these industries have common characteristics of having high levels of FDI, the impact of FDI on the increase in the wage premium for high-skilled labor can be interpreted as not being limited to these industries but in general.
These results provide useful policy implications which bolster the positive impact of foreign firms. As foreign firms increase sales of domestic survival firms, the mechanism for linkage and technology diffusion effects should be expanded to reinforce growth of domestic firms. For example, there should be places to exchange business information and opportunities, and the government should provide various incentives for foreign firms to develop linkages with domestic firms. Furthermore, the linkage between foreign and domestic firms should be expanded to services such as R&D, accounting, consulting etc. beyond the manufacturing sector.
Also, as presence of foreign firms in the same industry increases wage premium for skilled-labor, adequate labor reallocation and job training are needed to balance supply and demand of skilled-labor forces. For example, the government should facilitate efficient matching through programs to connect domestic labor supply and demand of foreign firms. In addition, the government should strengthen the social safety net for low-skilled labor, to aim for inclusive growth.
 

The interest in the African Continent in the international community has grown significantly recently. During the past 10 years, African economies have grown at a much faster rate than before, and many countries of the world are now entering African countries hoping to pre-occupy profitable markets or increase trade volumes. Indeed, the fact that 7 of the world's 10 fastest growing economies by real GDP growth rate are African countries suggests that many African countries have great potential for future economic development. In this sense, this study looks closely into Brazil's foreign policy and its expansion strategy towards Africa, and identifies a number of practical implications for Korea. Especially, this study focuses on Brazil's relationship with PALOP, namely the group of Portuguese-speaking African countries - Angola, Mozambique, Cape Verde, Guinea-Bissau, and Sao Tome and Principe.
Both Brazil and PALOP were former colonies of the Portuguese Empire for more than several hundred years, and thus basically share the same language and culture. Based on these unique social-historical ties, Brazil has historically had a close relationship with PALOP, and greatly increased the level of development cooperation, especially since the Lula administration after the beginning of the second millennium. It warrants a closer look from both practical and academic perspective as Brazil's development cooperation with PALOP, often called "South-South cooperation," deviates significantly from "traditional" development cooperation as implemented by Western developed countries hitherto, and at the same time, has shown to have had a very positive impact. The Korean government recently recognized the strategic importance of Angola and Mozambique, as they are one of the most resource-rich countries in Africa. In this context, this study will discuss Brazil's development cooperation strategy with PALOP in detail, especially focusing on Angola and Mozambique, gauging pros and cons of building a partnership with Brazil from Korea's perspective.
In Chapter 2, the study looks closely at the historical connection between Brazil and PALOP, dividing it into 4 periods, 1) from the 15th to 19th century, 2) after the independence of Brazil in 1822 up to the early 1950s (the "cooling-down" period), 3) from 1960s to the early 1980s (the period of restoration), 4) from the mid of 1980s to Brazil's economic crisis in 1990s (the period of shrinking relations), and finally 5) from early 2000s to present (the period where relations were closer than ever).
During the first period, Brazil's relation with PALOP, especially with Angola, was seemingly very close. For example, such history as the transatlantic slave trade from PALOP to Brazil, frequent meetings of high officials between these two regions, the dispatch of the Brazilian army to Angola to fight against Dutch forces, and secret attempts by the Angolan anti-colonial resistance to incorporate Angola as one of the states of Brazil after the independence of Brazil clearly confirm it. However, during the second period, Brazil's interest in foreign policy was mainly concentrated on countries in Latin America, Europe, and the USA, and thus the relations between Brazil and PALOP became weak and tenuous. The fact that those of African descent in Brazil failed to consolidate their political power also accelerated the deterioration in the relationship. But again, during the third period, PALOP-Brazil relations were largely restored as Brazil began to pursue independent foreign policy stressing the importance of "South-South cooperation" with African countries. Also, the outbreak of the oil crisis forced Brazil to seek good relations with oil-rich African countries. Consequently, Brazil's exports to African countries rose by 129% and import by 300%. Brazilian banks and firms began to expand into Africa as well. During the fourth period, however, the relations stagnated again as Brazil experienced a severe economic crisis. But after year 2000, the Lula government again took the initiative in taking Brazil’s relations with PALOP to a whole new level.
Actively seeking independent foreign policy, the Lula government tried to improve relations with virtually all African countries, not just with PALOP. As a result, the number of Brazilian embassies, as well as diplomats in Africa, almost doubled since 2002. The president himself also frequently visited Africa, 34 times to 23 different countries. A variety of development cooperation programs were newly launched or expanded during his regime such as education programs PEC-G and PEC-PG for foreign undergraduate and graduate students respectively, in addition to aggressive expansion of credit line by BNDES (Brazilian Development Bank) towards Africa; and humanitarian aid in the field of health, education, and agriculture. However, after Dilma's government came into power, Brazil has begun to experience a serious economic crisis, and thus the size of cooperation programs is likely to be reduced significantly. But during Dilma's regime, Brazil would expand its cooperation with African countries to include military cooperation ？ specifically the export of warplanes - and thus it is likely that Brazil's foreign policy towards Africa may remain close in near future.
In chapter 3, we further discuss in detail Brazil's expansion to PALOP - especially, in areas such as development cooperation, foreign direct investment, and bilateral trade - based on a variety of official statistical data. Overall, it is safe to argue that compared to other "giants" such as US and China, Brazil's presence in Africa is still relatively weak, at least in terms of various statistical figures. However, seeking a new approach with "South-South cooperation," Brazil's relations with African countries, especially with PALOP, still warrants an in-depth evaluation. Its characteristics can be summarized as follows: First, the absolute majority of Brazil's development cooperation in Africa seeks to transfer so-called "made-in-Brazil" social development programs, which had been successful in Brazil, to African countries under the label of "technical cooperation." Brazil, several decades ago, also experienced similar health and education problems, e.g., high prevalence of HIV/AIDS that African countries are currently facing, and it is thus highly likely that, if correctly implemented, Brazil may emerge as a better partner for many African countries than Western countries. Second, the number of triangular cooperation is surprisingly large. In fact, ABC, the Brazilian agency which roughly corresponds to KOICA in Korea, clearly articulates in its mission statements that Brazil actively seeks triangular cooperation opportunities, especially with Western developed countries. Third, Brazil's aid towards PALOP clearly aims to attain regional leadership within the CPLP (Community of Portuguese Language Countries). Fourth, Brazil's aid structure is extremely diversified and fragmented without any central coordinating agency. Though it is apparently Brazil's central governmental agency of international development cooperation, ABC has very limited power, and aid projects tend not to be properly monitored and evaluated.
Fifth, BNDES have played an important role in Brazil’s support for the development of many African countries. Sixth, with respect to some "major" development cooperation activities, especially in Mozambique, Brazil is aggressive in seeking commercial profits. And lastly, Brazilian multinational firms prefer a high level of localization in PALOP than any other foreign countries.
Furthermore, this study also compares Brazil's characteristics discussed above with other major foreign countries that are currently actively cooperating with PALOP. As a result, we could observe that Brazil behaves in a similar way as those countries in many aspects, but at the same time has some clearly distinctive features as well. First, concerning the first characteristic discussed above, namely exporting “made-in-Brazil” programs, it would be safe to argue that it is clearly one of the strongest competitive advantages Brazil has. Second, the fact that the number of triangular cooperation is exceptionally large can also be seen as one of the positive aspects of Brazil's cooperation strategy with African countries. It implicitly suggests that Brazil's "South-South cooperation", aside from the fact it is seeking a "new" way of cooperation, can basically be seen as being complementary to Western donors' aid programs. Third, the limits of Brazil's aid structure such as a lack of monitoring and evaluation sysms can be found in many other emerging donors, e.g., India and South Africa. Fourth, the most obvious and perhaps strongest competitive advantage Brazil has in PALOP against any other major country is that they share the same language and culture. Here, it is worth noting that in PALOP countries, the image of Brazil is relatively positive and its products are often seen as something "prestigious".
Consequently, we could draw the following implications for Korea from what has been discussed so far. First of all, Korea, also an emerging donor, is currently experiencing a high level of aid fragmentation just as Brazil does, although relatively less. We do not believe that it is simply negative as it perhaps seems, especially in the case of Brazil. Certainly, a severe fragmentation of aid structures can lead to various negative effects, diminishing overall aid effectiveness. On the other hand, aid fragmentation can actually have some positive effects as well, such as quicker response to actual needs in developing countries with possibly better decision-making. In Brazil's cooperation mechanism, we believe, the positive aspect of aid fragmentation is more predominant.
Second, the unique historical and cultural ties between Brazil and PALOP is clearly a strong competitive advantage that no other country can easily imitate. In this sense, building a partnership with Brazil clearly seems to be beneficial for Korea in building good relations with PALOP.
Also, since the year 2000, many emerging donors began to successfully increase their aid or engage in "South-South cooperation" with African countries. The total amount of aid from emerging donors are now significant and cannot be easily ignored. As more countries that were recipients of aid in the past are becoming donors, international aid is becoming more diversified than ever before. In this context, we strongly argue that Korea needs to invest more efforts toward maximizing its aid effectiveness through international cooperation with other traditional or emerging donors.
Third, Brazil, mainly because of the same language, prefers to hire locals than send expatriates when implementing projects for development cooperation, especially in PALOP. It is clearly opposite of what China usually does. We suggest that Korea also needs to increase the level of localization, show better understanding and greater acceptance of local partners and, if possible, active hire local employees. Moreover, as Brazilian aid agency ABC emphasizes, no-conditionality and mutual benefit from development cooperation is vital for long-term success. In this sense, it is interesting to see how the ProSAVANA project in Mozambique may develop in future.
After becoming a member of DAC recently, Korea is straining become a more respectable donor. In this context, a lot has been said and written to answer the following question: what is a "Korean" way of supporting development of Africa? We believe at least a part of the answer to the question above can be found in the case of Brazil.

 This research aims to pursue industrial cooperation and coordination between African countries and South Korea through the analysis of Ghana and Uganda’s mobile financial markets and its surrounding environment in Africa, specifically Kenya. With the support of the international community, African economies and their industries have begun to bloom. However, addressing the totality of the financial sector, there is still a long way to go due to limitations in distance, institutional infrastructure, and social agreements. Even so, Africa is headed on the right path, especially with the proliferation of mobile phones. In Kenya, many are enjoying the benefits from finance services offered, i.e. money transactions to glossary shopping, through Vodafone's M-PESA service. It can be said that the African mobile finance services are considerably mature compared to that of other regions.
Chapter 2 analyzes the African financial markets, its supervision system and operating structures. It should be stated that the United Kingdom and Germany had a significant impact on Africa’s mobile finance services. M-PESA was established by the UK’s overseas development agency, DFID, and Vodafone. The institutional framework was established by Germany’s GIZ program.  Success of M-PESA, format of M-PESA became the de-facto standard in Africa and other developing countries. Using Kenya’s market as a basis for this research, as the financial mobile services is considered most mature, the research was extended to Ghana and Uganda’s financial sectors, including their mobile phone environment.
In Chapter 3, this paper examines the presence of ODA agencies in Africa and examines the financial sector supported by DFID, USAID, GIZ, and related multinational consortium. The DFID took an active role in designing and implementing the service, USAID assisted with pre-developed services, and GIZ focused on administrative policy as well as institutional support. Along with the agencies aforementioned, individuals and MNCs in the private sector, such as Bill Gates foundation and multinational corporations like VISA, Master card and Citibank, supported African financial inclusion issues on the behalf of international consortiums such as CGAP, Making Finance Work for Africa(MFW4A) and others.
Chapter 4 addresses the financial sector in Ghana and Uganda, including mobile phone services through the comparison of financial institutions and mobile service providers. This paper also covers a survey conducted on individual attitudes of mobile finance services through a consumer behavior model.
Resulting the need for the presence of oversea donors in both countries. Lastly, a discussion on the strategies that need to be effected for Africa through perspective ODA agencies and corporation in Korea.
In Chapter 5, supported by the analysis thus far, this paper provides directionality and a detailed scheme for Korean aid agencies and companies. The suggestion for short-term strategies to target the African market is the provision of infrastructure and technical education. Korean ODA agency and government should provide platforms for public-private cooperation with the private sector.
For medium and long-term strategy, the Korean government must support companies entering Africa, also in addition to, Korean companies offering infra structure and services. Furthermore, financial institutions should enter the African market to support Korean companies for sustainable activities in Africa.
To conclude, this research will contribute to the Korea’s political economic interests, Africa’s financial inclusion and further development of Africa. One of the key challenges for development is financial access, providing ease of access to finances could assist in the alleviation of poverty. As there has been a proliferation of mobile phone networks throughout the developing nations, the mobile finance system presents itself as a highly opportunistic means to resolve the challenge of financial inclusion and positions itself as a platform for new opportunities. 

 This study aims at searching current status of Chile and Peru public procurement market and analysing the method of entering the market for Korean companies. ‘Public procurement’in this paper defines to supply goods and services by governments and international agencies. Korea have made an agreement with Central and South America Countries about public procurement part in FTA. (Fermentation: Korean-Chile FTA, Korean- Peru FTA). This study focuses on Chile and Peru government procurement market and UN market by PAHO with connecting Korea by economic agreements. PAHO is an international public health agency working to improve health and living standards of the people of the Americas. It was founded in December, 1902. It is part of the United Nations system, serving as the Regional Office for the Americas of the World Health Organization, and as the health organization of the Inter-American System. PAHO’s procurement scale is about 585 million dollars in 2013. PAHO has raised strategic fund for Central and South America Countries’s health care projects. PAHO mainly give these countries technical support for health care and procurement process come under technical support process. PAHO’s procurement process equates to UN process. Chile’s government procurement scale by Chile Compra is 10.2 billion dollars in 2014. ChileCompra is a government agency under Ministry of Finance, that operate five e-procurement system and monitor the procurement activities in government department. The procurement scale by ChileCompra is 35.3 % of total scale. The rest scale is by Public enterprise and Ministero de Obras Publicas. In Chile, public procurement policies are nothing to give any preferential treatment for foreign companies and small and medium sized businesses. So, to enter Chile’s public procurement market, Korean companies should consider to localize and participate in tender process. Peru’s government procurement scale by OSCE (Organismo Supervisor de las Contrataciones del Estado) is 13.7 billion dollars in 2014. OSCE is a government agency under Ministry of Finance, that operate one e-procurement system and perform a procurement activities instead of government department. The procurement scale by OSCE is 69 % of total scale. The rest scale is by ProInversion, UN agency, IDB, CAF. In Peru, public procurement policies are similar to Chile, not to give any special treatment for foreign companies and small and medium sized businesses. To enter Peru public procurement market, Korean companies should consider to localize and participate in tender process by various routes, especially KOICA’s local procurement process. In comparatively analysing the cases to enter Chile and Peru public procurement market by Korean, Chinese and Japanese companies, Japan’s strategies is to adopt indirect method for joint venture with local business or using local partner, because in Chile and Peru’s vendor registration each procurement government agency request on local business licence. Japan focus on improving the images for Japanese goods and services and capturing public procurement market gradually. China’s strategies are to adopt direct investment to buy local enterprise and participate public tender process as local one. China focus on participate various loan project or investment project premised on employing Chinese related to the project. Otherwise, Korea’s strategies are systematic nothing, because Korea have successful bid case based on the political events, that, for example, Korean President visited Central and South America Countries, or Ministry of Foreign Affairs and KOTRA cooperate the proposal of Central and South America Countries and inculcate their government for G2G project. The most problem is that Korean companies don’t have long period plan for Chile or Peru public tender market, but only look for victory on short time. Accordingly Korean companies suffer loss after loss based on the short period for negotiation with Chile or Peru procurement officer. Korean strategies for public tender market in Chile and Peru should be modified to go toward systematic guide and cooperation network with local Korean companies or competing countries’s companies. But Korean’s support system for entering foreign countries have some weak points as follows: ① main support countries focused on developed countries (ex. USA, UK, and so on), ② only support contents concentrated public tender process, a few contents for contracting, negotiation and follow-up management stages after tender process. This paper suggests that Korean support systems ① develop a consulting guide included simulation analysis for localization, ② arrange co-findings with IDB, CAF, and so on, and financial cooperate with competing countries, ③ connect local (Korean) partner for long negotiation time after tender process, and ④ consult some legal problems in follow-up management stages. This paper represents much to providing the adoptable route to access Chile and Peru, not only informing Chile and Peru tender process. However this paper has follow-up tasks as; deepening a study about ① cooperation network with local Korean partner and competing countries’ partner, and ② manuals for public procurement management in Central and South American countries. 

 This study aims at finding out (international) cooperation in the fields of culture, economics, and environment for promoting Korea-Cuba relations. Expected delaying of normalization of diplomatic relation between S. Korea and Cuba which it is not clear how soon this would happen, our research question focused on what strategic choices could be helpful to promote future relations for both countries.
Of course, it could be consider a giving up strategy as one-side method in negotiation of normalization of diplomatic relation between S. Korea and Cuba. However, even if S. Korea could not obtain overwhelmingly large benefits with getting in a situation, unilateral concessions would not be considered in a good way for international negotiation. If S. Korea also recognize the limited situation with win-set changes, such as by using strategies that would set a deadline for when given that it has limited, or no choice, this kind of pushing strategy is to work as a disadvantage for better negotiation. Beyond giving up or pushing strategy, therefore S. Korea must consider the changing market situation in Cuba such as a closely related with a possibility of America’s embargo release for Cuba in near future and a possibility of changing political circum stances, etc. and rather than being in a hurry to step on a course for strengthening ties, S. Korea must take actions in a way of more realistic methods with a long-term process for making normalization of diplomatic relations for both countries.
The other method is to creating special conditions by changing circumstances and inducing Cuban concession with some ways as below: First, as a little bit easy and a possible option, ‘Move Cuban Political Leaders’. We understand that Cuban political leaders have played a great role as important decision-making entity, especially in the context of diplomatic policy-making structure established more strongly and for a long time in particular after Cuban Revolution in 1959. By providing them strong incentives and leading them to keep away from N. Korea, it will lead to normalize diplomatic relations with S. Korea. However, in fact this strategy is not easy to realize as well, because Cuban diplomatic policies have been sustained for a long time on a basis of upholding loyalty and a cause for their foreign policies, especially with N. Korea as well.
Second, ‘Move N. Korea’. As Cubans make sense to talk about, “it depends on improvement the relationship between S. Korea and N. Korea” when asked about the most serious obstacle for normalization of diplomatic relation between S. Korea and Cuba and many point out by saying that recovering of relations with the communist N. Korea for S. Korea is the most important thing. However and in reality, there still remain a serious question about how would S. Korea be able to take a signal from N. Korea that it does not matter for the normalization and move into peace relation for both ones.
Third, ‘Move the USA’. currently the USA accomplished lots of a diplomatic achievements, such as diplomatic normalization with Cuba, reaching a great settlement on nuclear negotiations with Iran, etc. and from this same position and participation, the USA will play a leading role by participating a peace-building process and will contribute to rebuilding denuclearization zone in Korean Peninsula, as same as S. Korea and Cuban issue. Finally, ‘move the other neighbor country who has a good relationship with S. Korea and Cuba in Latin American region’. Of course, the third country who has friendly ties with both countries in Latin America could play as a leverage and persuade Cuba to join diplomatic negotiation. However, this strategy is also hard if we understand the complicated diplomatic geopolitics in Latin American region, in particular in the conditions of the dominant of left governments and other economic relationship as well.
Even this research identified there exists alternatives and methods mentioned above such as changing strategy and inducing the changing of circumstances, it is still hard to make a diplomatic normalization within a short period between S. Korea and Cuba. However, one principle which this research strongly suggest is that, regardless of when diplomatic relation achieved by using various strategies, it must be designed to improve relations with strategy and cooperation methods. Instead of considering when and result(e.g. normalization), this research focused more process and searched a various way of cooperation method, emphasizing on promoting human interchange and expanding people’s contacts, strengthening economic ties between S. Korea and Cuba, and finally two countries have a great potential for cooperation in a field of environment, or climate change issue.
Up to now, K-wave is booming and increasing friendly Korean image in Cuba and is another potential power, such as Korean companies who want to take advantage of Cuban opportunity through creating new business in Cuban market, or it helps an other catalyst to improve international development cooperation in the field of environment and sustainable development, climate change issue, all of these approaches will help to make a good relation naturally in near future even it will take a little bit long term each other.
Based on this awareness, cultural cooperation is possible with the following policy suggestions. We understand in many senses Korean culture and contents for entry into the existing Cuban market seems too early stage yet, because we can not know exactly what is the real consumer market and sometimes it is difficult to identify in-depth and various levels as well. However, already we have experienced and accumulated lots of materials and created useful methods for entering into the other Latin American cultural markets where are currently growing in the private sector. This kind of bench-marketing from other country in Latin America will be helpful to develop a new market approach for S. Korea into Cuba.
However, concerned about cooperation method and direction related with Cuban case, it must be more careful. Because of having a colonial history for a long time and economic blockade from the USA currently, sometimes Cuban cultural market has a great resistance against oppressive manner from other foreign culture. If we understand this national sentiment, S. Korea must adapt and access through just pure meanings of cultural exchange by mutual understanding and harmonizing it with in cultural contents (e.g. non-ideological materials), rather than showing off economic and technical superiority of S. Korea.
This kind of policy priority should be considered as an important guideline and adopted into real cultural cooperation activities each other. If we also understand the current popularity of the Korean culture and contents which is rising around the mania groups rather than the public in Cuba, cooperation must focus on appealing power and should have a high focus on selected targeting small groups and anticipating its spill-over to the public in near future. For example and based on the consumer survey, S. Korea should consider the popular ‘telenovela(television serial drama)’ as target type drama which match the tastes of Cuban consumers.
If we understand the main consumers for K-Pop is groups of teens and twenties and then they must be the first target for Korean television dramas, movies, etc. It is also necessary to introduce and access in conjunction diverse cultural contents, such as plays, musical, dance, and folk performances as well.
In addition, it is necessary international cooperation for building more broadcasting infrastructure in Cuba. and free showcase, fan autograph meeting will be good cooperation methods in enhanceing and expanding contact opportunity each other. In the case of Cuban consumers who enjoy Korean culture and if we consider the existing various and relatively diverse groups such as younger audience in K-Pop and other audience in movie market, and women and older people in dramas, so called 'line-up' is established at the moment. In the conditions of understanding this consumer variety in Cuba, from now the ‘line-up’ must be enhanced for every member of the household through creating an integrating genre that family member can enjoy all together. In other words, emphasizing the ‘family’ is the need to absorb all ages.
In the case of broadcast video contents, S. Korea-Cuba should participate in co-production process. if Korea has the varios skills and technologies in aspects of hardware(world-class level) for making broadcast video contents, Cuba has various culture, natural environment and artistic sensibility. It should combines and produce a high level of work. In order to enable the cultural exchange between S. Korea and Cuba, not only broadcast cultural content, it should be included literary and cultural festival, sports, education and there is a need to improve the exchange of medical fields as well. For example, authorities in both countries make a great effort to develop educational programs in the field of Korean cultural education and exchange, or invite Cuban experts who know Korean culture.
In economic terms, it is necessary to consider the following points. If we think the current USA- Cuba normalization and then in the case of release of economic blockade against Cuba in near future, Cuban economic growth is a matter of time. Korean economic cooperation toward Cuba in the short term and before establishing diplomatic relations, Korea should focus on expanding export items and volumes with Cuba as main goal. Expected sectors are construction equipment, IT communication, agricultural machinery for development of agriculture and natural resources. According to the analysis of KOTRA, automobiles and parts, hotel and home appliances, information and consumer communication devices, pharmaceuticals and medical equipment, mining equipment and processing machinery, etc. will be included.
However, after achievement of diplomatic normalization between S. Korea and Cuba, it will go further beyond only expanding economic trade . After normalization and in the short and medium term, economic cooperation with Cuba will be required granting of credit. From initiative and as a complement to minimize the risk of granting of credit, it will make more trade opportunities each other, including being guaranteed a stable sales for trading companies and exchange a bilateral investment, guaranteed by guarantee agreements for a stable economic activities each other.
Furthermore, after reviewing foreign investment and industrial development policies which are emphasized by Cuban authorities currently since 2008, this research finds out that Cuban government wants more foreign investments in the fields of energy, tourism industry and others(infrastructural parts), such as power generation, telecommunications, industrial complex, ports development, oil exploration, etc. For these, S. Korea can cooperate with Inter-American Development Bank(IDB) and other international financials by enhanceing multilateral cooperation channels.
The possibilitis or potentials of environment cooperation for both countries started from reviewing many national environmental strategies and sustainable development policies in Cuba. However, Cuba has lots of problem for sustainable development, such as the state budget deficit, labor shortages, poor environment management, capacity for sustainable development is quite low. In addition, in the process of economic open, reform currently it is now asking a new governance and become urgent for Cuban sustainable development model. Besides the various impacts of climate change : typhoon(hurricane), drought(increased water stress in Cuban), water management system, air and water pollution and biodiversity destruction, rising sea level threats(in the coastal lowland areas) are another matters of unsustaibable way of development and urgent issues for requiring international cooperation. S. Korea-Cuba environmental cooperation in the sustainable development dimension is required, especially in the parts of renewable energy development and greenhouse gas reduction sectors by providing economic incentives(adaptation and mitigation balancing) will reduce climate change impacts, natural disaster risk, etc. In this case GCF funding and technology transfer will be useful mechanism. 

 Egypt is one of the economy in the Middle East and North Africa with great potential in terms of population size and natural resource reserves. As well, it may realize economic growth and diversification through industrialization because it doesn’t depend on oil or natural gas excessively and currently has basic foundations in manufacturing sectors.
Starting from this assessment on the Egyptian economy, this study inquires into the appropriate direction of Egypt’s future industrial policy and, further, aims to propose some policy measures to strengthen economic ties between Egypt and Korea.
Egypt, as Korea did, adopted industrial policies for industrialization and industrial up-grading merely to be unsuccessful. Import substitution industrial policy in the 1950s and 1960s led to only stagnant productivity and large trade deficits. Later in the 1990s, Egypt shifted its policy toward export promotion, but the policy ended with protection for vested interests of old uncompetitive manufacturers. The result left the Egyptian economy heavily dependent on staple industries with low value-added such as textile and clothing, food, and oil and chemistry.
While Korea promoted new high-tech industries as strategic sectors to level up its position in the international value chain, Egypt adopted a strategy to support all of manufacturing sectors rather selected industries. Policies to attract foreign direct investment, to develop attractive industrial zones, and to produce technology and skilled labors were also disappointing, which was mainly attributable to corruption and red-tape.
Relying on Korea’s experiences with consideration of the current situations in and around the Egyptian economy, this study suggests some directions for the future industrial policy in Egypt. First, Egypt needs to selectively support strategic industries with large employment absorption capacity. Second, Egypt needs to upgrade its industrial structure in the mid or long run, although in the short run it may focus on investment in infrastructure and mega civil engineering projects for prompt job creation. Third, Egypt needs to refine incentive mechanism to attract FDI by enhancing labor market flexibility and streamlining administrative procedure. Last, Egypt needs to ensure political stability, corruption control, and government efficiency, which are all pre-conditions for successful implementation of an industrial policy.
When selecting strategic industries, Egypt should mainly consider three aspects of candidate industries: static and dynamic comparative advantage, global market growth, economy-wide spill-over effect. Through considering and measuring these three aspects, this study selects 9 industries as Egyptian strategic sectors: primary metal manufacturing, non-metal mineral manufacturing, food and beverage, chemicals, textile, metal manufacturing, electric equipment, rubber and plastics, furniture. Further, this study proposes more active cooperation between Egypt and Korea in 5 industries out of 9 above: primary metal manufacturing, food and beverage, chemicals, electric equipment, rubber and plastics.
This selection is based on match-making between the Egyptian strategic industries and Korea’s overseas investing industries. As cooperation tools at industry level, this study suggests Korean companies’ participation in the Egypt’s electric power generation and distribution, creation of industrial zones in Egypt exclusively for Korean companies, sharing of Korea’s experiences in industrial policy, enhancing the Egyptian capacity for R&D and vocational training, and supporting the establishment of a national chemical research institute in Egypt. 

 Recently there has been developed intense competition between great powers, which are willing to integrate Europe and Asia into a single economic bloc. The world powers are entering into the era of division and congregation depending on their interests with intense efforts made to dominate geopolitical superiority. This looks like the Eurasian plate is fluctuating.
The intense struggle for the hegemony in Eurasia between great powers is mainly being carried by international transport corridors passing through the continents. International transport corridor is not just network of routes to transport cargo and passengers, but a transversal line of international political economy, in which great powers are making efforts to dominate and extend their influence.
Eurasia has been the arena of competition on international transport corridors between great powers for a long time. Due to the fact that Eurasian Silk Road is the connection between transportation route, independent actions and approaches of each countries are taking places. Therefore, we need to focus on the fact that the Eurasian Silk Road is a complicated ‘space of game’, in which competitions and cooperation between countries are being made. Particularly, the giant stampede on Eurasia silk road between US, China, and Russia is giving Korea great significance, since Korea is the peninsula, located in the intersection of the Pacific and the Eurasian Continent and is sensitive to hegemonic changes of the ocean and the continent.
The purpose of this study is to create new opportunities for the new cooperation space, and simultaneously to seek the ways of peaceful reunifications of two Koreas through it, based on the analysis of the geopolitical and geo-economical changes building Eurasia Silk Road. Focusing on the intricate ‘New Great Game’ between the global super powers in Eurasia, especially triggered by ‘One belt-One Road’ plan of China, which is transforming from trans-regional great power into global super power, we are going to seek the way of building Eurasian Silk Road together.
Recently complex strategical project on Eurasia among China, Russia, and US has been activated already. However, Korea’s ‘Eurasia initiative’ is still remaining in the stage of planning. Even though the road map of ‘Eurasia Initiative’ was set up in the end of 2014, it has not detailed realization plan, so any progress is not being made except the ‘Rajiin-Khasan Project’.
For these reasons, discussions on key elements of China, Russia, and US’s strategies of building silk road, their geostrategic meanings, and mutual contract and possible collaboration of ‘Eurasia Initiative’ based on them have great significance. So, in other words, it depends on this, whether we can maintain new engine of economic growth, and dynamic momentum of peaceful reunification of Korea by the active efforts to connect Europe and Asia into ‘one continent’, or we could not overcome the limitation of a divided country and we will excluded from Eurasian cooperation community.
Thus, in order not to sink on the geopolitical confrontation relying on one ocean or continent power, it is important to seek new ways of ‘Eurasia Initiative’ as a middle power country. This is, in the world of ‘New Great Game’ between super powers, Korea needs to seek its own empowerment with the stake holders, such as Central Asia countries, ASEAN countries, India, and Mongolia. It is important to secure the right to speak, escaping geopolitical competitive construction, by taking complex neutral actions among China, Russia, and US. In addition, in the situation of antipode of US-centric international political economic order, ‘projection of power’ needs to be avulsed, since it can be seen as an attempt of china-centric power balance. In other words, community of profit and common destiny needs to induce new Eurasia economic cooperates and development model to overcome gap between countries and to coexist together, not to expend market dominated by inertia of the empire. Also, US’ ‘Pivot to Asia’ should sublate ways, which are aggravating complications, such as reinforcement of partnership by supremacy inhibiting China’s meteoric rise, but should be readjusted to be the partner of developing Asia’s dynamic growth potential. Dice towards the continent of Eurasia already has been thrown. Remnants are the strategic approach of ‘Eurasia Initiative’s evolution, escaping from the traditional geopolitical landscape of hegemony and the conflict.
The problem of how to derive construction of cooperation is important so far, with the situation of absence of economic cooperate mechanism and unoptimistic security situation in Northeast Asia. To solve this problem, it is preferable to do ‘geo-economical approach’ rather than ‘geopolitical approach’ to set the priority on economic co-operation. And first in importance is to establish a ‘Northeast Asia Economic Corridor’ by enhancing planning convergence of each Northeast Asian countries. This can be called optimum partnership program combining China’s 6 economic corridors construction promotion in accordance with their ‘One Belt-One Road’ strategy, Russia’s EEU, Far East development in accordance with the ‘New East Policy’, recently raised TEBR, Mongolia’s ‘Transit Mongolia’ and ‘Steppe Road Initiative’, and Korea’s ‘Eurasia Initiative’.
Northeast Asia Economic Corridor is not a new concept but is rather a concept and initiative, consolidating bilateral, multilateral cross-border co-operation, which has been developed focusing on building international transport corridors in the border areas between North Korea and china, and among North Korea, China, and Russia. Northeast Asia Economic Corridor is an effective preventive measures to avoid existing geopolitical confrontation and conflict between ocean and continent powers. It’s core content is realizing ‘2+4 cooperative structure’, cooperating in transport logistics, trade industry, agriculture and forestry marine products, and energy resources, focusing on building the China-Korea, China-Russia-Korea economic corridor in the eastern end of Eurasia Silk Road. It is building China-Korea economic corridor, based on the enhancement of adjusting China’s ‘Liaoning Costal Economic Belt Plan’, ‘Dandong Development Plan’, and North Korea’s ‘Huanggumpyung and Wehuado Development Plan’, along with South Korea’s ‘Pan-Yellow Sea Area Plan’ together. And also, it is building China-Russia-Korea economic corridor, based on the enhancement of adjusting China’s ‘Chang-ji-tu Plan’, Russia’s ‘Far East Development Strategy’, North Korea’s ‘Lason Development Plan’, and South Korea’s ‘Pan-East Sea Area Plan’.
This, of course, is a biased composition, concentrated on the continent, and it discloses the certain limits, since it excludes main stakeholders of Northeast Asia, such as US, Japan, etc. Especially, if Northeast Asia countries keep uniting with the alliance, focused on bilateral relations, It would not be easy to get initiative building China-Korea Economic Corridor, and also the Northeast Asia Economic Corridor. And considering South Korea-US-Japan’s triangular relation’s trend of US-centric networking alliances in confrontation with North Korea-China-russia’s triangular relation, South Korea, the nation confined to alliance structure, is in a hard position to get the initiative on building economic corridor. In particular, Japan is the kind of ‘cold spot’ in Northeast Asia economic cooperation, and in this regard, securing Japan in the structure of Northeast Asia Economic Corridor would be the key factor in determining success and failure of the building economic corridor. It is possible to carry Japan in the structure of multilateral cooperate structure, since Japan can have an adverse impact on strategic composition if Japan is excluded from the discussion of building Northeast Asia Economic Corridor. Furthermore, Japans’ participation can lead US’ participation, which is an offshore country but very influential in Northeast Asia. Through this, we can anticipate that promoting Northeast Asia Economic Corridor could have leverage effect leading peace and prosperity in Northeast Asia beyond the geopolitical confrontation.
In conclusion, building Northeast Asia Economic Corridor is the powerful plan to achieve South Korea’s ‘Trust-building Process on the Korean Peninsular’ and ‘Northeast Asia Peace and Cooperation Initiative’, and also it will provide momentum for the construction of inter-Korean economic community, along with the cooperation in transport logistics, communication, and electricity, based on the establishment of transport corridors between North and South Korea. The crucial factor of building Northeast Asia Economic Corridor would be North Korea’s decision to participate. So, we have to develop multilateral cooperation projects toward North Korea, related to building Northeast Asia Economic Corridor with the annulment of 5.24 ban measures for inducing North Korea’s participation.